Sensex down half a percent; auto, oil and gas stocks plummet

A benchmark index of Indian equities markets was trading half a percent down in the afternoon trade Tuesday after the Reserve Bank of India left all key policy rates unchanged.

Interest sensitive stocks took a hit, with scrips of automobile, oil and gas, fast moving consumer goods (FMCG) companies plummeting.

However, there was good buying in the information technology (IT), capital goods, and technology, entertainment and media (TECk) stocks.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 19,577.75 points, was trading at 19,497.89 points around 12.15 p.m., down 95.39 points or 0.49 percent from previous day's close at 19,593.28 points.

The Sensex touched a high of 19,672.72 points and a low of 19,471.12 points in the trade so far.

At its review, India's central bank left all key policy rates untouched to calm currency markets that saw a sharp depreciation of the rupee in recent months, while it conceded that risks to growth have increased and retail inflation has remained high.

The repurchase, or the repo rate, which is the interest the Reserve Bank of India (RBI) pays for short-term borrowings from commercial banks, has been left unchanged at 7.25 percent, so has the reverse repo, or short-term lending rate, which is at 6.25 percent.

The cash reserve ratio (CRR), or the share of deposits banks must keep with the central bank, is also maintained at four percent.

The decisions were taken in the first quarter review of the bank's monetary policy for the current fiscal, conducted by RBI Governor D. Subbarao, who said: "By far, the biggest risk to the macroeconomic outlook stems from the external sector."

Major sectoral indices of the S&P BSE which declined included automobile, oil and gas, fast moving consumer goods (FMCG), public sector undertakings (PSU) and metal.

The automobile index plummeted by 149.62 points, followed by oil and gas index which was down 127.59 points, FMCG index was trading 109.88 points lower, PSU index was down 102.18 points, and metal index was 96.30 points down.

However, IT index moved up by 67.10 points, capital goods index increased by 37.13 points and the TECk index was up 6.42 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading flat at 28.45 points or 0.49 percent down at 5,803.20 points.